Senegal secretly borrowed €650 million from international lenders last year through derivatives known as total return swaps, documents reveal. The West African nation tapped funds from Africa Finance Corporation and First Abu Dhabi Bank, using newly issued domestic bonds as collateral in arrangements that give lenders priority over existing bondholders.

These undisclosed loans came after a 2025 state audit revealed at least $7 billion in hidden debt under the previous administration, pushing Senegal's total debt beyond $40 billion or over 130% of GDP. The country is now seeking to renegotiate a $1.8 billion IMF bailout package that was paused following the debt revelations.

The IMF said it was unaware of the swaps' terms, noting that such financial arrangements would typically be disclosed during debt sustainability analyses. Total return swaps have become increasingly popular among cash-strapped governments facing high borrowing costs, allowing quick access to capital at lower rates by giving lenders rights to substantial bond holdings.